BlackRock’s Larry Fink has no regrets about about one of his firm’s most public failures, the purchase of Stuyvesant Town in 2006, along with partner Tishman Speyer.
“With the information we knew about Stuy Town, with the opinions we had from lawyers, we probably would have done it all over again,” Fink told Crain’s.
BlackRock, the world’s largest asset manager, with $4 trillion under management, bought the 80-acre, 110-building housing complex with Tishman for $5.4 billion in what, at the time, was the largest real estate deal in American history.
In 2010, following the 2008 financial crisis, the partners were forced to default on the property. The purchases financiers, led by CW Capital, took control of the complex.
“We all have failures in our careers,” Fink told Crain’s this summer. “Fortunately, mistakes happen less frequently for us than most firms.”
Looking back, Fink blamed outside macroeconomic forces, rather than the deal’s fundamentals, for the default.
“You could say the leverage was probably way too large,” he said. “But if the credit crisis didn’’t happen, it would not have had the results that it had.”
Earlier this week, the Blackstone Group and Ivanhoe Cambridge agreed to pay $5.3 billion for the complex, raising about $2.7 billion in equity. Blackstone’s head of real estate, Jonathan Gray, told The Real Deal the company wants to own the property “for a very long time.” [Crain’s] – Ariel Stulberg